Digital native Gen Z consumers still love shopping in physical shops and that has big implications for the beauty sector as these consumers spend a bigger proportion of their spare cash on cosmetics than any other generation does.

Superdrug

Given that the Gen Z demographic cohort is now the biggest single group of consumers globally, companies need to be paying attention to what they want.

AS Watson, the giant business that owns the UK’s Superdrug and Savers chain, certainly is and has come up with a new report based on its own research into Gen Z.

What did it discover? The company said “insight shows [Gen Z] prefer in-store shopping, they love the social and experience aspects of browsing and shopping at physical stores with their friends. Ninety nine percent of Gen Z shop offline and they like shopping in ‘destination stores’, stores in shopping malls and city centres.”

Describing them as “the future of modern retail”, the company also said that as many as 86% of this generation’s consumers are beauty shoppers and a massive 70% of the spending by the people it spoke to goes on this category.

The company has access to huge number consumers as it operates more than 15,000 stores globally under its 12 different retail brands. It found that when young consumers visit stores, they want to use the kind of technology they can also find online. “They look for brick-and-mortar shopping coupled with technology so in-store digital devices are key drivers to sales success,” the company said.

That means augmented reality and artificial intelligence should be applied to the physical shopping experience, “as well as the linking of Offline and Online (O+O) experiences through apps and social media.”

The company’s focus groups also saw its customers asking for more fun options in-store, such as ‘magic’ mirrors and the chance to create virtual makeovers that can be shared with their friends on social media.

AS Watson has already started introducing experiential initiatives and has been heavily involved in creating headline-grabbing experiences in all of its markets. These experiences range from beauty flash mobs and classes in China, a Watsons Taiwan Tech Fun store with technology devices including StyleMe, Tap & Shop and Digital Beauty Advisor, and a series of Taiwan events for Gen Z customers to drive the O+O experience.

And in Europe, its fragrance retailer The Perfume Shop this month added the Go In Store digital service that connects e-shoppers with store experts for a live video chat. That seems to be paying off as it has seen its conversion rate rising 155% for shoppers interacting with the service.

Sustainability also counts for these shoppers, the company said and they're actively seeking ethical retailing. The firm's initiatives to address this have included clearly signing vegan products in stores and online and it even opened a special Little Vegan Pop Up Shop in the UK, which offered 1,000 vegan beauty essentials.